Setting the Course Ahead
Dear Stakeholders,
It is my pleasure to present our annual report, showcasing the significant achievements
and robust growth story of Karur Vysya Bank this year. Our unwavering commitment to
excellence, innovation, and customer satisfaction has fortified our position as a leading
financial institution.
Macro-Economic Overview
As we reflect on the fiscal year 2023-24, we observe the easing of global inflation
rates that allowed central banks to temporarily pause interest rate hikes. However,
geopolitical tensions remain a significant concern. Yet, resilient emerging economies,
notably India, have continued to drive economic momentum.
India stands out as a beacon of economic strength. Domestic economic activity has
thrived, fuelled by sustained growth in manufacturing and services sectors. The real
estate sector has rebounded, corporate finances are robust, and investments in sectors
such as power generation, cement, and steel have surged due to higher capacity
utilisation. Inflation trends favourably, fiscal consolidation efforts are on track, the
external balance sheet is strong, and the financial sector shows remarkable resilience.
Business Performance
From a financial perspective, I would like to share some key highlights of FY 2023-24
of the Bank. The Bank witnessed a growth in Total Business by 16% to Rs. 1,63,536 Crore
and the total income during FY 2023-24 moved to Rs. 9,863 Crore compared to previous FY
2022-23 of Rs. 7,675 Crore. During FY 2023-24, the Return on Equity (ROE) increased from
13.13% to 15.98%, and the Return on Assets (ROA) rose from 1.27% to 1.63%. Moreover, the
operating profit showed an increase from Rs. 2,476 Crore in FY 2022-23 to Rs. 2,829 Crore
in FY 2023-24, reflecting positive performance trends.
Strategic Expansion and Digital Integration
In my last year's letter, I informed you that our priorities would be to sustain the
decent performance of the past years by driving digitalisation, strengthening Feet on
Street capabilities, forging partnership with NBFCs and thereby increasing the
shareholders' return. This strategy enabled us to grow our business across all the
verticals during FY 2023-24, achieve a strong bottom-line without any compromise on Asset
Quality. You will observe that we had walked our talk on all these aspects.
During FY 2023-24, we expanded our footprint with the addition of 39 branches. Looking
ahead to the current fiscal year 2024-25, our branch expansion strategy entails opening 80
lite branches and 20 regular branches, primarily focussing on the Southern and Western
regions of the country. The introduction of lite branches is aimed at enhancing our market
reach and strengthening our liability franchise.
We have devised strategies for FY 2024- 25 and expect the total business growth to be
in mid-teens, with higher growth contribution from Liabilities. Impetus would be on
improving the Retail and MSME Loans with strong focus on yield and to further granulise
the overall loan books. While the bottom-lines are expected to move further during this
current fiscal, our robust collection mechanism and recovery actions will ensure that the
slippages and asset quality ratios remain at minimal levels.
In the medium term, we will focus on widening our offerings, grow our presence in
unpenetrated & underpenetrated markets - both through physical and digital presence -
fortify our partnerships with NBFCs/Fintechs for co-lending and further strengthen our
risk and compliance culture.
Digital Strides
On the digital front, your Bank is always motivated to plan and implement the latest
technological trends and innovations and we undertook a plethora of activities during the
year in this direction. We enabled mutual fund solution in mobile and internet banking
channels and upgraded the lending solutions to enhance the technical capabilities of the
platform for supporting new requirements. Further, we implemented a solution to onboard
customers from multiple business correspondents through a single business platform and
also migrated the applications to the latest platform, thereby providing secured services
and a seamless experience to customers.
Enhancing Cyber Security Measures
Cybersecurity is a top priority at our institution, with robust measures in place to
safeguard sensitive information and protect against cyber threats. Our dedicated team of
cybersecurity experts ensures the integrity and confidentiality of data through continuous
monitoring, threat detection, and incident response protocols.
By implementing cutting-edge technologies and security controls, we proactively defend
against cyber-attacks and unauthorised access to our systems. Regular security assessments
and training programmes ensure that our staff remains vigilant and well-equipped to handle
evolving cybersecurity risks. Our commitment to cybersecurity underscores our pledge to
maintaining the trust and security of our customers' information in an increasingly
digital landscape.
Strong Board Governance
Our leadership team plays a pivotal role in steering the institution towards its
strategic objectives and ensuring operational excellence.
I am happy to share that Shri J Natarajan has been inducted in the Board as Executive
Director of the Bank, given his unstinted knowledge about the Bank for about four decades
and his expertise across different facets of banking. As this designation is created in
the Bank for the first time, Board identified Shri J Natarajan to shape up & systemise
this position during his tenure, to ensure a smooth succession process.
I am equally happy to inform you that Board has inducted Shri R Vidya Shankar as
Director of the Bank. He brings with him rich experience & expertise in the field of
law, recovery, credit monitoring and I am sure his contributions will add value to the
Bank. At this juncture, I place on record the appreciations of the Board to Shri M V
Srinivasamoorthi and Dr K S Ravichandran who have demitted office owing to completion of
tenure.
Now, our Board comprises nine members, including myself as Chairperson, MD & CEO,
an Executive Director, a Non-Executive NonIndependent Director and Non-Executive
Independent Directors. These seasoned professionals bring diverse expertise in banking and
financial services, guiding the bank through dynamic market landscapes. Their collective
vision emphasises innovation, customer- centricity, and sustainable growth, fostering a
culture of transparency, accountability and good governance.
Effective Risk Management and Compliance
Our Bank employs a holistic risk management framework that encompasses operational,
legal, treasury, regulatory, and financial reporting domains. To oversee the formulation,
execution, and monitoring of our risk management strategies, our Board has established a
dedicated Risk Management Committee. We systematically address major risks through
continuous mitigation efforts, while ensuring that risk assessment remains an ongoing and
integral part of our operations.
Compliance is non-negotiable for us and our Bank has put in place comprehensive policy
and guidelines to proactively manage and mitigate any potential compliance risk that may
pose a threat to our operations. Each year, we conduct a comprehensive compliance
assessment to identify significant risks and opportunities. The compliance framework is
reviewed every year and this continuous process nurtures a culture of accountability,
adaptability, enabling us to navigate obstacles.
Sustainability Vision
I am pleased to introduce our vision and dedication to sustainability. In a world that
is increasingly conscious of its environmental footprint, our bank is dedicated to being a
steward of sustainable practices. We recognise that our role extends beyond providing
financial services; it includes fostering economic growth, supporting social wellbeing,
and preserving the environment for future generations.
Social Responsibility
At Karur Vysya Bank, our commitment to social responsibility is at the heart of
everything we do. We have undertaken various initiatives and efforts to make a meaningful
impact on our communities. Our bank is dedicated to being a force for good, consistently
striving to uplift and empower those we serve. Through our focus on education, healthcare,
and community development, we aim to create positive and lasting change.
By investing in these critical areas, we believe we can foster inclusive growth and
build a stronger, more resilient society. Our dedication to social commitment is a
testament to our belief in creating a brighter future for all.
Outlook
As we celebrate our achievements and the milestones of the past, we look forward with
anticipation and excitement to the future. The upcoming years promise new challenges,
growth opportunities, and ground-breaking accomplishments. We are committed to continue
our consistent and credible growth journey in the years to come by leveraging our legacy
built on dedication, expertise, and a pioneering spirit. We will strongly persevere our
endeavour to deliver a sustainable & uninterrupted growth in a dependable manner.
Gratitude and Commitment
Our journey to success is one we embark on together. I am delighted to reflect on the
progress we have made and the milestones we have achieved with your unwavering support.
Our collective efforts have enabled us to navigate challenges and seize opportunities,
ensuring sustained growth and prosperity. As we move forward, we remain dedicated to
fostering strong relationships and delivering value to all our stakeholders.
I express our heartfelt gratitude to all our customers, shareholders, business
partners, investors, employees and other stakeholders who have been integral to our
success. I would like to place on record our sincere gratitude to Central and State
Government Authorities, RBI, SEBI, MCA, Stock Exchanges - NSE & BSE, Depositories and
other Regulatory Authorities for their valuable guidance and support. I am also thankful
to the Mutual Fund houses, FIIs, Insurance companies and corporates for their support.
Regards,
Dr. Meena Hemchandra
Chairperson